"With forecasts saying rates may stay higher for longer, three-year fixed rates may become more popular."
Skipton Building Society has reduced fixed rates across it mortgage ranges and launched new three-year fixed rates.
Rate reductions will apply from tomorrow to Skipton's residential, buy-to-let, new build and Government scheme product ranges.
In addition, end dates will move to December on selected residential and buy-to-let products and to March on selected new build and Government scheme products.
News agency, Newspage, sought the views of brokers on whether this is start of another week of mortgage rate cuts and if three-year fixes are becoming more popular with borrowers.
Justin Moy, managing director at EHF Mortgages, commented: "It's encouraging to see another week kick off with more rate reductions, and the introduction of the three-year fixed range will interest borrowers and brokers alike, especially with market speculation that rates will stay higher for longer. Tracker margins are priced a little better but the fixed rate reductions are small and are not going to have any significant impact on the market unfortunately."
Elliott Culley, director at Switch Mortgage Finance, said: "It's positive to see more lenders offering three-year deals and giving more choice in the market to clients. With forecasts saying rates may stay higher for longer, three-year fixed rates may become more popular. They may also be more attractive to borrowers as they are slightly cheaper than two-year fixed rates and don't tie you in for as long as five-year fixes.
Richard Campo, founder at Rose Capital Partners, added: "Skipton cutting rates is just par for the course for the remainder of the year, which makes it exceptionally difficult for borrowers and indeed advisers to find the best product. The rate cuts are being driven by falling money markets and a slow property market, which means lenders have to compete with each other to win business, which drives down costs. In the main, we are recommending penalty-free trackers to our clients so they can either ride the market down if the Bank of England starts cutting rates as expected next year, or they can opt to switch to a fixed rate as and when fixed rates bottom out. I think anyone taking a longer term fixed rate right now will look back on that in three, four or five years' time and perhaps feel they are paying over the odds. That said, everything can change in a heartbeat if something unexpected happens."
